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How do you get users to fall in love with your product on their first visit? How you do avoid losing visitors on their first visit? Short answer.. you get them to the AHA moment..

There’s a lot of talk and literature about finding the AHA moment. James Currier from Ooga Labs (10 years, 10 companies with at least 10 million users each) and a personal hero of mine recommends spending 50% of technical resources on your onboarding or on what he calls the “first user experience”.

You’ll never have more attention from visitors than in that first visit to your website.

It’s up to you to onboard them step by step until they reach what has been dubbed this “AHA moment” also known as the “WOW moment”. Here are some well know examples of AHA moments. It’s only when they have reached that point that visitors will understand the value you offer, will fall in love with you and will be able to explain your value to others.

Sounds perfect right?

The only problem is, it’s often really difficult to know what your AHA moment actually is. Sure you could rely on your assumptions and run with your gut feeling. But as a data obsessed growth hacker I’ve seen too often how our assumptions and gut feeling turned out to be wrong. In this article I’ll try to address how we did this for our team collaboration tool Twoodo . How we were able to discover our AHA moment even though we didn’t have many visitors and little hard data or metrics to rely on.

The Hard truth about Hard Data

Over the years I’ve had countless discussions with other co-founders and growth hackers about finding the AHA moment. I’ve always found that companies with large amounts of visitors and data have an easier time of finding that moment than companies who have very little to work with. If you’re a successful company with millions of daily users of tens of thousands of customers then you can tap into your hard data to find what your AHA moment is. I would recommend hire a rockstar data scientist, give him access to all your logs and ask him to run correlation analysis on each of your features to determine which website events will most highly predict an activated user or a super user.

Unfortunately that’s a luxury that some of us don’t have. So how do you find the AHA moment when you don’t have a data rocket scientist at your disposal or enough data to feed his genius with.

So we did it by hand..

It doesn’t take 100000 users to find your AHA moment. However you do need to have a few who really love you. If you’re at a point where you have 30 or more users/customers who truly love your product, come back to it at the right frequency, who you know are totally addicted, I will argue that you can find your AHA moment. Here’s how:

1. Identify the users:

At Twoodo we’re Mixpanel addicts. Mixpanel is a user-centric events based analytics tools that can give you invaluable information on what your users are doing on your website (you can also check out Kissmetrics). Basically it shows you what people are doing once they’ve arrived on your site.

Using a simple filtering query on Mixpanel’s Explore tab we were able to identify some “power users”. In this case I’m searching for all our visitors who signed up to our website, did this less than 4 weeks ago and who have already made at least 200 posts on Twoodo. In our experience this is a clear sign of an activated user who understands the value and is being retained by it

I was also careful to exclude all users who had been invited to Twoodo by a friend or colleague as their perception of our value would be positively biased.

I won’t show the results as there are some email addresses in there but the results came back with 42 profiles.

I consider these users to be “very activated” and I now want to find out if they have anything in common with their first visit.

2. Find out what’s happening on a user’s first journey

In the early days we used to do a raw dump of our logs and started analyzing these user’s first Twoodo visit step by step. This is what it looked like..it wasn’t fun.

After a few days of reading these we started planning to parse the logs into excel files to make the process less painful but Mixpanel saved us from having to do that. Another problem with this method is that it only tracked server-side events and couldn’t track browser events. But the idea in both cases is the same:

Recreate a visitor’s first journey step by step.

It’s a long and painful task but if done correctly you will start to see a pattern.

Thanks to tools like Mixpanel and Kissmetrics though the visualization of these events is much clearer. The events have color codes and drop down menus with all the event characteristics. In this example you can see the intensity of usage of an activated user’s first day. This is a screenshot of the visitor flow of a new user in his first minutes and hours. By looking into each event you can understand the visitor’s first user journey.

3. Re-create the journeys

So the next step is to extract the important steps and log them somewhere. After re-creating his journey I found this :

He signed up from the web version (not mobile)

He added his first and last name

He uploaded a profile image

He completed the walkthrough

He created a company and uploaded a company logo

He posted 17 messages

9 of these messages included a task

He viewed the calendar view

He viewed the task view

He added tasks to his calendar

He customized his theme

He logged back in 6 times in 3 days after his 1st visit.

And there.. I have one customer activation journey of a user that got to the AHA moment!!

I then proceeded to do the same thing for the 42 other “super activated users”. I opened a google doc spreadsheet and ran all these events into dedicated columns. Each column = 1 event. Here’s what part of it looked like:

4. Run this on visitors who didn’t get the AHA moment

After running through all 42 profiles I started to find patterns on events that kept coming back up. We found 7 events that almost all our super users had in common. Some of these, like customizing the theme or inviting other people on the first visit, were contrary to our assumptions. We then had a big talk which included a debate over correlation vs. causation.

This lead us to do the exact same steps but with 50 users who were not activated at all.

We searched for users who had signed up but never came back or visitors who had used us for few days never to come back again. The idea is to compare the ”super activated users” with the lost “non-activated users” and see what the main differences are.

5. Spot the difference

So what had the super users done that the “never to be seen again” visitors hadn’t?

We quickly had a precise picture of events that had been taken by activated visitors and left out by non-activated visitors.

1. They all invited at least 2 people on their first visit even before testing the tool (this was contrary to our assumptions).

2. They input their first and last name.

3. They uploaded a profile picture.

4. They almost all uploaded a company logo.

5. They created at least 5 tasks on their first visit.

6. They came back to the app 7 days consecutively at least.

7. They viewed the task and/or calendar view.

6. Build it into your website

Based on this information we created a B version of our onboarding that would guide new visitors through this journey, step by step and removing all the fluff and friction. They basically HAD to go through these steps.

We put the “invite people to your company” much higher in the funnel.

We made sure visitors would input their first and last name

We created a gamified step by step task list once they arrived on the platform

7. A/B Test

We then ran a careful AB test to verify that we weren’t making a huge mistake. We let the test run for 3 weeks.

The results were quite astounding. With the B version we have an increase in activated visitors of 75%. Not only that but new users were inviting 112% more people to the platform than before. They were also posting 139% more messages and tasks on their first visit. We later also found that activated users were also being retained longer*.

*Of course we were careful to run these stats through a statistical significance calculator. Luckily enough A and B has such a difference in conversions that we didn’t need to run the test too long (2.5 weeks) to reach a significant test.

Here are some more damning facts from a study of 1.4 billion search queries. 6% were from paid search. 8% of internet users click on 85% of search engine ad clicks. Organic traffic wins 94% of the time (Search Engine Watch, 2012).

Let’s continue with a good ol’ text book definition:

“Content marketing” is a subdomain of inbound marketing. “Inbound marketing” means using pull rather than push techniques to draw visitors to your website or product. Content marketing consists of creating audio, visual or written content with the purpose of delighting people and drawing them to your website or product…. Oh and almost every one is doing it

Content is not just about driving people to the top of your conversion funnel and forgetting about them. At least, that’s not what we think at Twoodo. Content needs to be targeted to your niches and built to answer questions asked by your potential leads and users. It can also serve to inform and entertain your personas, allows you to show thought leadership and gain authority in social media, which will in turn affect the success of your company. Think SEO. Content marketing for startups can work awesomely.

Content marketing isn’t just blogging!!

There are so many types of content to choose from :

Blog posts

Guest blog posts

Webinars

Comics

Case Studies

How-to Guides

Press Releases

Infographics

Reports & Trends

Articles

PDF and eBooks

Web Forums

Reviews

Videos

PPTs

Images/Photos

Interviews

Lists

Slideshares

Q/A websites

Competitions and Reviews

Pinterest pins

Instagram pics

Facebook posts

Twitter tweets

Linkedin posts

Google+ posts

Forum discussions

Local Business Listings

Podcasts

Just to get you enticed, here are the numbers that convinced us that content marketing was a user acquisition channel to test:

inbound leads cost 61% less

SEO has a 14.6% close rate compared to 1.7% on outbound tactics

B2B businesses with blogs have 67% more leads

B2C businesses with blogs have 88% more leads

Incapsula’s 2014 bot traffic report found that only 44% of internet traffic is actually human – so it makes sense that humans will respond to humanized tactics rather than automation.

This doesn’t mean that other marketing tactics such as paid SEM or social ads should be ignored. Paid ad campaigns done wisely and on the correct platforms can yield great results. But what used to be a great way to gain traffic often isn’t as affordable in the long run. Channels such as SEM or Facebook Ads have rapidly become expensive and saturated. New emerging “wild west” platforms like Twitter and Pinterest offer great opportunities but in the back of your mind there will always be that feeling “with paid channels you’re I’m renting ad space on the web.. with content marketing I’m owning it!” Content is long-lasting.

I truly believe Ads may win a battle, but content will win the war.

Let’s look at these numbers again and dig a bit deeper:

The average CTR (click through rate) for ads is 0.1% (Hubspot, 2013). You would literally have to pay for 1000s of clicks just to get a handful of people clicking on your link. The average cost per conversion across all industries in 2013 was $10.44 (down from 2012’s hefty $24.40). This is something to think about next time you are trying to calculate what your CAC and LTV are going to be.

To summarise: content marketing…

takes time BUT gives long-term high value

improves your SEO tactics

requires you to truly get to know your personas

is cheaper than SEM

will turn your knowledge into conversions

will help you build relationships with influencers and the crowd (hello Series A / crowdfunding…!)

What has content marketing really got to do with my startup?

Press, Investors, Pundits and even your clients and users want to see traction.

“Traction is proof that somebody wants your product. Ideally, it should communicate momentum in market adoption.”

Content marketing affects the first four of these points. The first 2 directly and the second 2 indirectly.

There seems a constant debate in startups – do we hire a developer or a marketer? On the one hand, product ultimately wins. On the other hand, a product can’t win if nobody has a clue it exists – ultimate fail. Seriously debate it with your co-founders rather than dismiss it is all I’m saying.

Our lessons learned about content marketing..

I’m going to focus on the content that we decided would give us the best overall results: guest blogging, and then blogging for ourselves. Written content is easily indexed by search engine crawlers, so we determined that would give the best long-term ROI than, say, an infographic which relies solely on social shares.

Above is an example of a guest blog we published on The Next Web on December 21st 2013 at the beginning of our content journey. As of May 2nd 2014 it has been viewed over 16,700 times (and counting). It has been shared over 2,500 times across Facebook, Twitter, LinkedIn, Pinterest and Google Plus. Two hours after this article was repromoted on The Next Web (approx. 6 months after it was originally published) 246 people came to our website. We were given the opportunity to delight and convince 246 potential users to sign up. The article has historically brought 1210 people directly to our website. Between Dec 21st and Dec 31st (new blog posts have an active life for approximately the first week after publishing – we allowed more due to the Christmas break) 213 people signed up to Twoodo. Our UTM trackers indicated that 78% of those came from the article. At the time we weren’t getting any PR or promoting ourselves in any other way. The only thing that had to be paid for were the hours put into researching and writing the article.

What were the mishaps along the way?

Content is not entirely straightforward. Here’s a summary of the roadblocks we had to deal with along the way:

the first 5 months were research + trial and error

some things work once and once only (or not at all…)

you cannot automate content creation

it’s hard to “force” content creativity!

We tried to write a blog post a day – but I burnt out pretty fast. We tried all the tricks that we could think of, but found that our ideal pace was 2 a week, in order for the creative juices to keep flowing.

OK. Now can I have the insider tips on how to create great blog posts?

So I will share with you my quick-fix tips, before you become a more profound writer (quite a few of these tips apply to other written and visual pieces of content as well):

great header image

nice font

lots of spacing

break it up with images and quotes

emotional AND rational message

intriguing headline

sub-headings that summarise

bolded key findings

Make your information interesting, actionable or entertaining whether it’s a webinar or an Instagram picture.

My favorite tools and tricks

Everyone’s got a list of things that work best for them. I use my own unique combination of (mostly free) tools to get what I need done. What I need are tools to a) get ideas b) get information to back up the ideas c) create quality writing/images d) promote e) track.

Social media and promotion:

bufferapp: schedule social media shares across the main channels, and monitor how successful they were

tweetdeck: follow conversations and URLs that matter to you, and take part in them

buzzsumo: search for content to share, and also find out who is sharing it by using their “export sharers” function

If you subscribe to the notion “build it and they will come” then you can stop reading here.

If, however, you know that the deluge of apps and online startups means that great ideas really do get crowded out, then read on!

Your startup needs all the help it can get. From my experience with growing Twoodo in a very competitive field I know it’s worth finding out where your business can be listed or reviewed in order to maximize traffic. Nothing wrong with that at all. The challenge, though, is that I never really believed that all these listing website could bring significant traffic. However after a bunch of testing and digging through a lot of bad apples we were able to discover which startup directories are legit and worth spending your time on to grab some initial traction. Our team, through trial and error and many submission forms later has come up with the best websites to spend your time on if user acquisition is important to you.

We would caution you that many are geared specifically towards SaaS/web apps. Sorry!

1) A startup directory list of 33 must-have startup places where you should have a profile

List yourself as a an alternative to your competitors. This has proved to be fruitful for us as a SaaS startup with lots of similar-but-not-the-same competition. It’s an easy way of displaying the differences to competitors and has driven traffic to our website. Long-ish filling-out process but worth it.

A place on the coveted TNW marketplace is by invitation or application only (and very few get through that process). It is worth applying for if you can work out a good deal to give users, and pitch it in a tantalizing way. Be generous, because the TNW audience is large and influential.

TechCrunch not only has a high standard of writing but strictly forbids blatant self-promotion. Try to get the attention of a journalist to get covered instead. This could mean a) guest blogging for TechCrunch (if you are not already an experienced writer, it will be tough to get published) and getting noticed by another writer or b) contacting every journalist until one finds your pitch interesting. Be careful – a negative review could do a lot of damage.

A must-do if you want to get noticed by angel investors. It is becoming a very popular platform, so if you are in the Alpha or private Beta stage it is especially important. Take the time to prepare a great profile and get endorsed by reputable people. Get your whole team to create quality profiles – investors take a team seriously, not just the product.

A great place to list your startup – easy, straightforward, and guaranteed a couple of hundred sign-ups. There are very few free places on the internet to list beta companies that are still active, so take advantage while the going is good for this website.

Essential platform to be around on, from the reputable YCombinator program. Submit news, links, and if you like, a link to your startup. However getting noticed is hard, and you would do well to contribute consistently to this community.

There are a bunch of subreddits, like kickstarter, entrepreneurs, growmybusiness and so on. The Reddit community is very sensitive to self-promotion so it’s wiser to stick to content and questions rather than blatant self-marketing. If the community likes you, the goodwill from them will hopefully pass along to supporting your venture.

Gust has an impressive portfolio of investors and VCs. It is a platform to assist in managing the investor-startup relationship. With so many high-quality endorsements you really need to craft a careful profile and keep it updated.

A platform (in beta) for giving businesses advice on which cloud services to use. Limited to online startups/SaaS in this case. After you submit, they vet your product and produce a review over which you have no preview to (so beware, if your product is still very buggy!).

All websites listed on TopAlternatives.com are ranked by popularity using Alexa’s traffic rankings. At a glance, it looks like a limited list of already-popular apps. Since Alexa is being used (and I really don’t like Alexa) this makes sense. Use the contact form to discuss getting featured.

This is a beta startup itself with the purpose of matching startups to larger businesses in order to solve their mutual needs. It is essentially B2B. There is a long application process asking for intimate details of your startup, but some information can be avoided if you wish not to divulge it.

Erlibird is reputable and legit – if you have the funds for it, go for it. Invite early adopters to your private beta from $49 and “Get on our Launching Soon” list and collect signups for $19. Options are also available post-launch for those of you no longer in private beta.

Has a lot of big names like Salesforce behind it, but it barely highlights that you have a once-off $399 payment to make to be part of it. Do some more in-depth research to see if it suits your app, before dropping $400 on such a service.

If your Alexa rank is over 500,000 (i.e. almost all new startups) they do not include you (unless you pay). You can also expect to wait 2 months, unless you pay a fee of $95 to be reviewed within 2 weeks. No guarantee of a positive review.

A B2B arrangement, whereby Capterra matches the best software solution with large companies (very useful for SaaS startups). It is free until they set up a deal with a buyer. To be considered, fill in a short form and await approval before completing a more extensive profile.

Pay $120 for an interview that goes live within 24 hours, and $60 for an article on their website to go live within 24 hours. They have an active social media presence with a modest Twitter following. Judge for yourself if the cash is worth spending but it may be overpriced.

With an endorsement from Eric Ries it’s hard to say no to this. It is, however, for apps that have not been built yet. I’m sure you could try to get the idea of your app validated (so long as you don’t give away the name) – though this is not the purpose of the service. There is a poor Twitter following, but it claims to rely on “experts” to review your idea, not the crowd.

The last few projects have been for advertising for Kickstarter projects. It does not seem to be very valuable for a general startup submission. Also, one of the questions asks “how many hours per month can you spare to work with them” which may not suit people who just want to drop a link and go. Research some more before you commit.

People love lists, for sure. This may or may not be a cool way of driving traffic to your startup – you will need to be enthusiastic about sharing on social media to make it work. It’s handy to have everything organized into lists nonetheless. Some lists get 5000 views but I don’t know how much will convert to traffic. It’s not a difficult thing to set up, so go for it.

2014 was yet another year filled with largely publicised security breaches of big and strong companies. Ebay, Apple and Sony are a chilling reminder of how vulnerable tech giants are to attacks. But don’t feel safe just yet, it’s not only the giants that are under threat. Our smaller companies can also be targets.

While building our startup we were amazed that security was not something our first users asked us about. I mean, in building what we call the future of teamwork, we handle a large amount of our customer’s sensitive company information every day. Security was a top priority for us. We also thought it would be a huge selling argument. Yet very few of our smaller clients even asked about our security measures and protocols. If ever the question would come up weeks after signing up and our “security” page is one of the least visited. Could it be that smaller companies are less worried about security?

In April 2014, we presented Twoodo at the Social Now conference. Against industry behemoths like IBM and Oracle, our tool shone through and won the appeal of the audience. Great! But then the questions arose about security – this was a B2B audience of vendors to large companies, mostly. We’d never been in such a context before and finally the security questions started pouring in.

A lot of the big companies and are struggling with the problems of BYOD policies (bring your own device) where employees were being rather reckless with security – logging into the enterprise app over free wifi, using a simplistic password, downloading a malicious app and so on. All tech startups are BYOD. We hadn’t even thought of checking if our own intern’s laptop had a firewall! It is not only BYOD that are the problem. Now, most companies hand out laptops, tablets and smartphones so that employees can work any time, any place. So, instead of coming to work to work on fixed desktops, the employee is taking work >> data everywhere (physically). Secure data is leaving the secure company building and is:

exposed to theft or loss

being used by others (children or spouse)

being used at home for online shopping etc.

This issue alone is one that smaller companies need to think about seriously.

How did security not become a priority issue?

Tech startups don’t often consider the role of security, unless security is part of what they intend on selling (or like us, they have a security guru on the team). SaaS startups in particular are vulnerable in this regard. Sure, there may not be time during the hectic early weeks and months, nor the manpower to implement a stringent security system. But wouldn’t it be worth it? What would you do if your laptop was stolen, and access to the user database or code was available to the thief? Unlikely – but possible, especially with easy-to-nab smart devices.

“Unfortunately, it is not enough for startups to recognize that they need to care about application security; they need to take action. The challenge is cutting through the apparent complexity and building-in application security from the very beginning, while minimizing costs.” Technology Innovation Management Review

The bright young non-techie founders in the startup world right now have a fatal flaw, in that they are so accustomed to being around IT that little thought is put into the risks involved in, say, free public wifi or letting Chrome extensions have access to your full email account. And also – not every technical co-founder is very experienced and naivety might be the fatal flaw in this case.

Here were the top 10 security flaws of 2013 – a handy checklist for noobs still learning the ins and outs of IT security:

In the end, the biggest security flaw is typically people, not the system. How often I hear ‘the system is fine but people are idiots!’

Don’t feel too bad. Here are some of the big companies hacked in the last year or so:

Adobe

Twitter

Ebay

Evernote

Feedly

Facebook

Apple

Yahoo

Sony

Some refer to it as the ‘year of hacking’ after all these internet giants fell down. And yet, even after the recent Heartbleed revelations, people are still loath to change the most basic and best first defense against hackers: a decent password.

But changes are creeping in. More services I sign up to now have fervent messages stating that they absolutely will not sell my data/soul for ad targeting or any other nefarious purpose. Services such as LastPass can generate unique passwords and also ensure that you only ever need to remember one.

But I digress. My point is – security is a hot topic and people are beginning to take on board the advice they’ve been given for years. As startups are having a hard enough time growing, convincing a skeptical public that you have excellent security measures can:

a) give you an edge over the competition, and
b) is just awesome to have set up from the beginning

Time and money are two things founders must spend wisely, that much is true. But would instilling security measures from Day 1 prevent future calamities that would ultimately cost more time and more money to fix? I would argue – yes. A startup that loses credibility with it’s users in the early days might never recover.

Where do we start?

IT is constantly shifting – there is no static fix that can be implemented, unfortunately. In light of this fact, Ira Winkler (from the appropriately named ‘Dark Readings’ blog) suggests that loss mitigation is a better approach to have than a simple ‘keep them out!’ frame of mind.

Yes, it will most probably be the user’s fault for making a mistake

- but your systems have to be there to take the fall and survive it. You must also realize that your own team members may be the unfortunate ones that wreak havoc on your system – not out of spite, but out of ignorance. This is where ‘awareness training’ typically comes in useful, but as Winkler asserts – it has to become part of habit and not just an occasional reminder like ‘don’t forget to bring an umbrella.’ It is the CEOs role to make this part of the fabric of the startup. Simply, the way you all work.

“People mostly have a strong relationship with their personal data. What’s worse? Having your digital camera stolen, or losing the pictures of your wedding day that were on the SD card? The data on the SD card is most important to most people. If people could have that relationship with work data, protecting it and taking care of it will most likely be habit. Having a (strong) pin code or password would be natural, not a hassle.” - Sonja de Vries, ilionx

When a person has a vested interest in the data, a personal connection, they are more aware of losing that data. But an employee for example will not have the same urgency at protecting the data that the founders or managers would. This is why security measures and security habits should not be taken for granted.

Relate IQ have a great blog post with practical tips for startups on how to have a security mindset from the beginning.

…BUT make sure to also read this Guardian article - it discusses some of the shortcomings of RelateIQ’s suggested security measures for hard drives in more depth.

Here is our top security advice for tech startups

Passwords and Identity Verification

A strong password these days is not good enough, leading the new norm in verifying your identity at a new level of security is Google with 2-Step Verification, read this link for a nice explanation

The 2-Step Verification process is an open standard, as such Microsoft is another example of a company that has recognised users are demanding better security and have adopted the open standard for 2-Step Verification in Outlook.com (formerly Hotmail).

The Google Authenticator mobile app makes the 2-Step Verification process a breeze, and since it is based on the open standard, it works with Microsoft’s 2-Step Verification for example.

Protect your source code

On the development side, our source code repository is also hardened against brute force password attacks, by adopting SSH keys over passwords for connecting to the repository.

As a team, working on MacOSX and Windows 7 and above our hard drives are encrypted by the built-in OS technologies (FileVault 2 and BitLocker, respectively). So in the event of loss/theft we can remain calm in the knowledge that any sensitive/confidential information remains safe. We use Google Drive for storing files in the cloud, removing the need to worry about backing up files.

You have to have an SSL certificate (also known as HTTPS) which will stop people on the same network to be able to read the information that you send and receive.

You have to limit access to files and directories on your server. They shouldn’t be able to browse your server to find information and private files should not be accessible without the user being verified (ie logged in). Amazon Web Servers provide great security tools for this, read up.

Limiting access and encryption

A simple way of guaranteeing no leaks is to simply not give people access. This is not foolproof, but it limits responsibility to a handful of individuals. If a leak occurs, it can be quickly identified in this case.

Grow, but grow safe

Many tech startups have a ‘growth team’ or ‘growth hacker’ as part of the core business. Why is this relevant to security advice? Well, part of what the growth team does is try to make signing up (for example) as smooth and convenient as possible for new users. A lot of ‘growth hackers’ recommend that you don’t have a 2-step authentication process because conversions drop – despite the fact that it is more secure. The same for Captchas.

Of course, you cannot entirely blame the growth team for people’s impatience, but you are facilitating them! Is this ethically acceptable? It’s up to each startup to decide.

If you are a SaaS provider with your sights set on the enterprise market, you better be ready for a long list of requirements around security and compliance… Managing ever-changing security and compliance requirements as your SaaS business scales is hard to do well. – Keren Elazari, Gigaom

This is not to put people off starting B2B business – not at all! – but don’t go blindly in without really thinking through how you are going to deliver a secure and trustworthy service.

We would like to thank Sonja de Vries, Security Awareness Consultant at ilionX, for taking the time to answer our questions – much appreciated!

At Twoodo we’ve read almost every white paper and report on team collaboration and workforce communication. All in all it’s probably taken us a hundred hours to go through all those documents. We wanted to start sharing the most interesting findings in the form of small infographics. Just to make it more digestable. So if you’re hungry for snackable stats about company communication and collaboration, you’ll love these…

The first stat that really stood out came out of a Holmes report and stated the enormous amount of loss that miscommunication can create.

We also found that the #1 reason why projects fail is due to bad communication.

So why is this happening? Well according to reports by softwareadvice.com many companies are using old inefficient ways to communicate.

which is scary when you consider how much time workers spend daily on communicating and collaborating.

Email takes a lot of heat. But let’s face it, email just wasn’t built for team collaboration and it wastes tons of time.

The way we see it, email is great for 1–1 communication but the world is changing. 1-many communication is becoming the norm and email just doesn’t cut it anymore.

And in come “social collaboration tools” which are build for teams and 1-many communication.

Our research then led us into the realm of the Future of Work. We were surprised to find that one of the biggest factors motivating employees to choose one job over another was “flexible work arrangement”.

And this also has benefits for companies as they spend less on office rentals.

But things can’t be all bright and beautiful for remote teams right? So what are their main obstacles?

The #1 answer was again communication and by digging a bit deeper we found what this communication problem was actually made of.

It’s been a few weeks since we’ve created these infographics.. so we thought we’d dive even deeper and bring some amazing new insights into the power of internal communication tools.

This post is about the best tips we could find on conducting effective meetings. Meetings remain one of the biggest time-wasters in companies today, compounding to huge annual losses of productivity year after year. Give time back to the team to get things done by implementing these tips.

1. The meeting is defined – scrum? Sales? Weekly catch-up?

What is the point of the meeting? What is the style? What am I expected to bring to the table (literally and figuratively)? How relevant is the meeting to me? After-works drinks and a sprint-planning meeting are two very different kinds of meetings. In advance, each person needs to know what is going on format-wise for most productivity to occur.

2. The person conducting the meeting pre-circulates what will be discussed, so if additions need to be made they can be done on time and not on the fly in the middle of the meeting

Preventing the meeting from going off topic is critical. It is all too easy for the point of the meeting to be lost, and for discussions or arguments to carry over onto unrelated issues. The designated person for organizing the meeting should appoint a time up to when new ideas should be submitted, and then distribute the agenda in good time for everyone to come prepared. This is the agenda that should be followed without exception.

3. A meeting is not a brainstorming session

Unless specified, a brainstorming session is not a productive use of a meeting. It is a vague activity that requires flexible amounts of time to get acceptable results. If something needs to be brainstormed, a brainstorming session can be set up afterwards with the right people.

4. Get really strict – the minutes-taker has an ‘off the topic buzzer’

If you have a lively team or group in a meeting, it can sometimes be more efficient to use a loud buzzer to warn people that they are going off topic rather than try to talk them down. The sounding of the buzzer signals that the person must stop talking immediately. This is not for every style of company, but for a passionate team it may be the faster way of reminding people that they are off-topic without having to waste time getting back to the original question at hand.

5. Meet immediately about small steps that otherwise slow down everything

Something like the 2-min GTD rule of replying to an email, not every decision needs to be made in a meeting. The expertise of your staff is not increased by only allowing them to make decisions under supervision. Allow them to make decisions with the understanding that they are responsible for the outcome. If they are unwilling to go this path, then figure out why. Is the company culture too condemning of mistakes? Is it difficult to prove accountability? Do the staff not want the responsibility for some other reason? In any case, find ways to have quick decisions removed from meeting times. This will also remove the need to take up much of more senior staff’s work time as they will not have to vet all the smaller ideas and questions from the team.

6. Present in data, and limit slides

Slides are often a waste of time to make as well as a waste of time to present. They fill space rather than inform. Do not use slides for anything except data that is essential to the point you must present. Limited writing. Limited pretty pictures. Just data, wireframes, hard facts and verbally explain the rest. All your decisions and input at the meeting must also be based on verifiable data, rather than speculation or “I just know it”. Otherwise, decision-making is hampered. If you really know you have a good solution, you will be able to succinctly explain why it is so.

7. It ends and finishes on the prescribed time (or earlier)

Starting time should be strictly enforced. There is rarely a good reason for people not to turn up at 09:00 rather than 09:05. 5 minutes may sound small, but if you have 6 meetings across the span of the day, this will compound into 30 minutes of wasted time. Develop a reputation for a no-tolerance to turning up late to meetings. I used to have a professor who locked the auditorium door precisely on the hour. Attendance for that lecture was always pretty good! Sure, there can be genuine reasons for being late and those are always to be accepted. But 9 times out of 10, everyone is able to be there with no excuse except tardiness.

8. If you don’t need to be there, don’t be there

That’s why you have the agenda in advance. Don’t go if you have nothing to contribute, and just check the minutes of the meeting later to catch up on what happened.

9. If you need to be there, be there

Equally, do not skip meetings where your presence is needed in order to answer questions or provide data. Managers need to go to the social events in order to maintain relationships with the team, boost morale, and allow more casual access.

10. Research: before you turn up with questions, check out if you can find these answers out by yourself – this saves time for everyone

Meetings are better when the questions asked are questions that can only be answered by that particular mix of attendees, rather than things that can easily be found elsewhere or by two individuals conversing. Perhaps this meeting is the only time you see a particular colleague – use that opportunity. Is it the only time sales and product teams are in the same room? There are many questions that need to be asked in this moment than can be answered over long email threads.

11. Everyone leaves knowing what they need to do next

If they don’t, it was a pointless meeting. If they weren’t expecting a to-do list, they shouldn’t have been there.

12. Make sure there are recreational meetings, not just work meetings

If group get-togethers are solely for hard-paced get-it-done meetings, then a poor morale will build up in the company. There need to be more relaxed settings for teams to hang out. They also need to be organized, and invites or notifications sent out. A ‘casual corner’ in an office is all well and good, but a full team invite to chill is also important to make sure the more introverted or super-busy are included in the bonding.

13. No devices if you can’t resist opening tabs

No phones, no iPads, no ereaders, no laptops open UNLESS you are a disciplined note-taker. In this age of ADHD this might sound impossible. But the reason you’re meeting in person is because it is necessary. Checking email or Twitter while someone is sharing their ideas or results means you are not engaging, and also being disrespectful. A 15 – 30min meeting should not spell disaster for 99% of your interactions that day (bar instant customer support or crisis negotiations). If you cannot resist changing between tabs whilst taking notes, switch to pen and paper and type up the tasks after the meeting.

14. Do not make it seem like less meetings equals you are less important

Are there some people in the company who would take it personally not to be invited to a meeting, despite not having anything much to contribute it? There are some who feel that they should ‘be’ there anyways. Make an all-round company objective to start holding meetings for the people who have an active input to give, and that everyone else will be kept informed by way of email or a collaboration tool. This approach to reducing meetings to ‘essential people only’ needs to be consistent and explained as a practicality and not a hierarchy issue.

15. Use a tool to measure accountability

Depending on the tasks that need to be done, you need to find suitable ways of measuring if things are getting done. How many leads per month should a salesperson close? How many pieces of content should a marketer produce? How many bug fixes should the tech team be able to get done? How long would it take the biz dev guy to get that partnership deal done? If you have an idea of the average acceptable output then use it as a benchmark. Don’t let this mean you get sucked into micromanaging. Make it about results. If a team member is able to accomplish the task with 20 emails rather than 100, awesome!

16. Answer questions rather than sit quietly

Everyone can do their part to make meetings go faster. No matter how sophisticated computers are, the best computer is the human brain. If you have an answer or piece of information that your colleagues could find useful in a meeting, give it to them. Don’t be shy! The faster people get the right info, the faster they can move on with the job at hand.

17. Allow a really productive meeting to go overtime

Sometimes, magic happens and meetings suddenly turn in an unprecedented but awesome fashion! Yes, timing is important – BUT if great ideas suddenly start rolling out, and really creative solutions start bouncing around savour the moment to harvest these ideas. Sometimes it’s just a serendipitous series of events, or just the right combination of factors. You’ll know when it happens.

18. Don’t force the casual meetings

Encourage, but don’t force. A classic sign of someone not wanting to be there is how often they check what time it is. Everybody has different personal commitments. Everybody has different preferences for social activities. Despite your best efforts, it’s possible that not everyone on the team gets along. This one came to mind from an experience I had when a guest at a medium-sized company party once. We were all having breakfast at a hotel (about 300 people as far as I recall) and I wanted to go back to bed for a while. The marketing or event team (I don’t know which) actually stopped me from going because they insisted I had to be in the room when the CEO walked by! I was baffled, mostly because I explained I was not an employee. And yes – they made me march back to my chair and suffer my headache for an extra hour.

Not cool.

Conducting effective meetings just takes a series of small changes

Instituting change is always tough. But think about it in terms of small steps. Managers need to take the lead on the new meetings format, and maintain the message that it is not an exercise in excluding people but of practicality. Employees should be encouraged to question their presence at meetings where they feel they have little real value to add or take away that couldn’t be conveyed in an email or report.

how we set up a kick-ass customer feedback loop that helped increase our activation rate from 2% to 30%

One of the greatest lessons of the past few months is that when building a SaaS company (or more specifically a team collaboration tool for the #hashtag generation) you shouldn’t overlook the soft data just because it’s not hard data. This is especially true when following lean methodology. Talk to your customers, always. Especially if you are serious about increasing your activation rate.

Ok, so that’s easy to say, but what does it actually mean and how do you implement it?

I’d like to share with you the tips, tricks and tools we used to develop a kick-ass customer feedback loop – even though we were still in private beta and we didn’t have huge amounts of traffic (around 200 unique visits per day). The feedback we have collected has greatly helped us increase our activation rate and engage with our users. It has also given us great insight into what features we should be building for our early customers.

1. We chose to go the “private beta” route

The first three months of Twoodo were spent in private beta mode. There is a debate about whether a SaaS startup should be open right from the start, but we decided to stick with the control that a private beta offers. The main argument for this was that it would allow us to incrementally grow our website at our own pace. We also wanted to only let who we had identified as our true early adopter segment right from the start. I’ll explain this a little further down.

In the first month of our private beta, we were extremely strict as to who we would let in. In order to be allowed to use the tool you would have to

Sign up to the waiting list

Fill out a questionnaire

Agree to a short Skype “webinar” with us (we ended up not enforcing this one as the survey gave us plenty of information)

2. Create a questionnaire that your users have to fill in

We set up an “Add me to your waiting list button” as the main call to action of our landing page.

To be honest, the questionnaire was pretty long and painful to fill out but we did that on purpose. By doing this we were sure that the users we were letting in REALLY had the pain we were solving and REALLY wanted to use our solution. You’d be amazed at how many people actually accepted to fill out the questionnaire. We were amazed ourselves. More than 50% of signups filled it out. Not only was this additional validation that we were solving a real pain, but we got tons of invaluable information such as:

the types of users that we were attracting,

the size of their teams,

their industry, the location,

the tools they were using, their workflows,

the pains that users were having with other tools,

some initial insights as to the functionalities they were looking for.

Without realizing at first, we had actually started a conversation with them. This is when we dropped the compulsory “Have a quick Skype with us” step to getting access to the website.

We were actually getting real live user cases within the questionnaire, a fantastic profile of our users and the size of their teams. We could use this information to then make their activation process easier and to start a real conversation with them.

At this point, our activation rate was 2% and the sign-up process was messy.

3. Offer a Skype webinar right off the bat!

The next email that we sent them was a “Thank you for filling in the questionnaire” + invitation link to the site, followed by an offer to do a 10-15 minute Skype webinar. The webinar had 3 purposes:

Our onboarding process wasn’t great at the time so this would help activate the user.

We could get live feedback as to what problems they had faced when first using tool.

We could create a relationship and learn to know our customer even more.

For the webinars we planned to follow this simple format:

5 minutes: understanding who we were talking to, what was their workflow, what was their pain.

5 minutes: onboarding them to Twoodo based on understading of their pain/workflow

5 minutes chit-chat and Q/A

They usually lasted well over 15 minutes. We started out by using Skype but then switches to Zoom.us after a while. The share screen on zoom works so much better than on Skype and was free up to 45 minutes.

Through these webinars we understood right away that our user interface was too complex. We were bombarding newcomers with too much information. This pushed us to carry out a large user interface simplification. Although not all users had the time for the webinar, the ones who did gave us great information. They are still using Twoodo today and have become some of our most insightful sources of feedback. The conversation with them has never stopped.

Through simplifying the user interface and making a first attempt at our on-boarding process, we increase the activation rate to 8%. This still wasn’t great. We needed more information as to WHY the other 92% were not having a great first time experience.

4. In-app messages

In general people will try your tool out for about 1 or 2 minutes and then either adopt it or abandon it forever. Getting feedback on those first seconds of a user’s journey are vital to increasing your activation rate. What did they like? What blocked them? What didn’t they understand? Was it our colors? Is there too much text? Are they seeing that big red button they’re supposed to click on? These are all crucial User Experience questions that we HAD TO answer in order to increase our activation rate. Tools like intercom.io (which we love) have the great advantage of offering in-app messages that you can trigger when you like. Here’s what it looked like on our website.

Closeup..

We set the in-app message to appear as soon as the user was finished with our 4-page walk-through (or had clicked “skip”) and started using the tool. Users saw a picture of David and a very short message. All they have to do was click an input box to give their feedback. There’s almost no effort for the user to send us a message (unlike sending us an email, or using a contact form) so we got tons of feedback from this. We identified some really basic things that users were not clear about and were able to fix those rapidly. Here’s some random examples of the feedback we received:

We established a list of all the feedback and grouped them by category. Some points kept coming up. The ones with the highest score would be attended to first.

We learned TONS from this.

1. Our product walk-through and on-boarding were still too confusing so we needed to simplify them

2. Users didn’t know how to add their friends to the platform

3. Some browsers were more tricky than others

4. The list goes on…

We fixed all these issues and progressively tested our new solution. We also started carrying our usability tests on www.usertesting.com. At this point we also started populating the most recurrent questions into a FAQ on a Google doc for future use.

After a month or so of testing and tweaking, our user acquisition rate had reached 17%

5. Install a live-chat. Be online.

Another great way to get feedback from users is to use integrated Live Chat systems. We opted for Olark as the installation was quite simple and they offer a free version (kind of hidden on their pricing page) for up to 20 chats per month. If you’re having more than 20 chats per month with your users, I’d definitely suggest to start paying for one (I know there are a bunch of other tools out there for live chat so feel free to share them in the comments).

We all installed Adium and linked the Olark live chat with our Adium accounts. Everyone committed to signing in to Adium as soon as they had our laptops on. It ended up being a bit too distracting for some of the technical team but we were sure to have at least one person from our team online at all times and it was really worth it. We received tons of user feedback from the live chat. We were also able to activate users live, get more info on what was confusing about our website and kept on filling up our FAQ guide for later.

Another cool feature is that you can see everyone who’s on your website at any given time with notifications that pop up during the day on your screen. To be honest, it was cool at first but became very distracting later on. Nevertheless it was a motivating “real time analytics” tool and if you wish, you can engage with users spontaneously.

At this point our activation rate had risen to 19%

6. Next day message for non-activated users

81% of users were signing up to our website, were giving good initial feedback to the in-app message, but were then still not using the tool. They had signed up but hadn’t been activated – they hadn’t been through the “minimum delightful experience”. So rather than playing an endless guessing game we decided to ask users why. Using Intercom we set up an automatic email that would be sent to “unactivated” users the very next day after they had signed up. As you can see we also used this message to introduce the iPhone app. Here was the message:

The major finding was that many of them were extremely busy and just hadn’t had the time. Some of us thought this meant “their pain just isn’t big enough”. Other thought we should continue trying to activate them while it was still time.

7. Drip email campaigns

We learned that if you’re trying to activate users on your website, there’s one good thing to know. A large proportion of users who sign up to your website and then don’t actually use it, do so just because they don’t have time. The main learning from this was that drip email campaigns are extremely valuable. We set them up using Intercom.

By setting up emails based on user behavior and sending them at 1 day, 3 days, 10 days and 25 days we were able to increase our activation rate to around 28%. We’re still working on improving this drip email campaign and hope it can take our activation rate past 40% in the near future.

8. Using our own tool

Twoodo is an online team collaboration tool. Because of this, we could also use our own tool to interact with users and improve our activation rate and retention. We created a “global” team called +twoodo-team. Users could simply post a message to +twoodo-team and we would all see it. Everyone in the team could then answer user’s questions and interact with them. It gave users a feeling of transparency and we got tons of feedback through this channel. The friction with contacting us was almost nil. We later changed our in-app message to explain to users how to contact us directly on Twoodo. This was great because users could use the tool and contact us at the same time. We could then reply and engage with them. If your tool has any such possibilities, grasp it right away.

At this point our activation rate is around 30%

9. Contact form

Like any website we had a contact form. The link to the contact form was in the footer. I’d say a contact form is a good first step solution if you have nothing else in place. But as we implemented all of the above tools, our contact form was seldom being used anymore. The friction and effort for users to fill out a contact form are simply too high. We get very few messages through it today.

10. Build a community

We love websites like Stackoverflow and Quora. They’re great communities that answer important questions. We’re thinking of building a similar community that will act as our FAQ + community + customer support desk.

What we’re thinking of implementing now: Qualaroo

Qualaroo looks like a fantastic tool to get users to answer short specific questions. Here are some examples:

Conclusion

You’ve made it this far so I’ll make this brief. Every user has different preferences as to how they will interact with you and at different times. I’d advise you to cast the widest net possible using the most customer feedback channels possible to help make your tool truly awesome. And don’t forget that the only SaaS sales strategy you need is listening to customers and offering them continual support.

In the next post, we will explain how we increased our activation rate from 30% to 75% using gamification and by continuing to talk to users.

a fast and comprehensible guide to SaaS startup metrics for people with little time to waste

Months after launching the first version of Twoodo we learned again and again to talk to our customers and to set up metrics to start measuring. Metrics, KPIs, metrics, KPIs! They enable you to analyze your user’s behavior, track progress, show traction, find bottlenecks and know what part of the sales funnel needs the most improvement.

Easier said than done.

You can easily get lost in what you should be tracking or how to track it. I know we did. So we sat down and decided to take care of it once and for all, and we came up with this guide to SaaS startup metrics.

We had read and stored tons and tons of articles on metrics. We finally decided to lay them down and summarize what we had learned in order to decide on what metrics were right for us early on in the game. We found that there were five approaches to SaaS metrics that really stood out. They would all be useful depending on what we trying to get out of it:

metrics to improve you product on,

metrics to impress VCs,

metrics for board meetings,

metrics for the fun of metrics etc.

We know that startup CEOs generally have very little time on their hands. Jumping into the metrics game can be quite daunting. That’s why we’d like to share with you our findings and hopefully help you save some precious time. It’ll then be up to you as to which approach you want to integrate and how much time you want to spend on it. This is in no way an exhaustive list. I’m more than open to being corrected or to receiving additional information to this guide to SaaS startup metrics.

A Guide to SaaS startup metrics

Lars Logfren has a very practical approach to metrics. It was an eye-opener for us. Basically put, the metrics you measure should depend on the advancement of your startup. For example, ”If you’ve only had paying customers for 2 months, it doesn’t make much sense to track lifetime value. But later on lifetime value is essential”. The great thing about these metrics is that they incorporate what stage your startup is in. That’s golden when you’re not certain about what you should be measuring. Here I’ve tried to summarize the 5 stages but you can see the full article here.

Stage 1 – Before product/market fit

This is when you still haven’t pinpointed who your ideal customer is. Carrying out customer interviews should help you validate who that ideal customer is. These customer development interviews are basically meetings or preferably Skype chats (less time-consuming) with potential users. They enable you to find out who the user is, what his main pain point are and whether your solution is solving that pain. The great thing is you can have an analytical approach to these meetings in order to come up with metrics.

Product-Market Fit Conversion rate =

Total # of potential users you interviewed who, liked your solution and decided to start using it / Total # of customer development interviews you carried out

>> “YES/NO this is our ideal target customer”

Stage 2 – When you think you have product/market fit

Sean Ellis came up with a survey question that allows to quantify and measure product market fit. It’s so simple and ready to implement that we used this technique over and over. The question should be asked to any users who have used your tool/website more than twice. Here is the question and multiple choice:

If we took away our product from you right now and forever. How would you feel?

Very disappointed

Slightly disappointed

Not disappointed

Not using the product (N/A)

Product/market fit rate =

Total # of users who replied “Very disappointed” / Total # of users interviewed

“You should have more than 40% here. If not you don’t have product/market fit yet.”

Don’t despair. It took us some time to get to that 40% rate. Read Sean Ellis’ article to see what you could do if you don’t get those 40%.

Stage 3 – When you’re certain you have product/market fit

Now that you’ve reached this stage, you’re starting to scale and experience serious growth. There are two main metrics you’ll want to look at.

Monthly Recurring Revenue which is the total revenue earned from the sum of all monthly subscriptions

Monthly recurring revenue (MRR) =

Total revenue earned from the sum of all monthly subscriptions

“Your target should be to keep this growing, always.”

Churn: This is the monthly number of paying customer who drop off. This number has a negative impact on your MRR. This number should stay under 2%. If it doesn’t, drop all else and concentrate on getting it under that level.

Your monthly customer churn rate (Churn) =

Number of subscribers cancelling their paid subscription this month / Total # of paying customers

“This number should stay under 2%. If it doesn’t, drop all else and concentrate on getting it under that level.”

Stage 4 – Growth has slowed down

At this point, growth from your main acquisition channels has slowed down. You start exploring new, riskier acquisition channels.

Customer Lifetime Value (LTV): How much money does a customer bring you before he leaves your product?

Customer Lifetime Value =

MRR / # of paying users x how long on average a customer keeps paying for your product before he drops off

Customer Acquisition Cost: The total cost it takes to acquire a paying customer from a particular acquisition source.

Customer Acquisition Cost =

Sum of all expenses made on a particular acquisition channel / # of new paying customers added through that channel

“A common rule is to keep CAC under a third of LTV and that a customer should become profitable within 12 months.”

Pirate metrics is a funnel based approach to metrics developed by Dave McClure. It’s pretty awesome and almost totally straightforward. I wouldn’t recommend it before you’re at least at the stage 2 we mentioned above. It goes like this: AARRR = First concentrate on Acquiring users, then Activating them, Retaining them, getting them to Refer you to other people and finally getting them to pay (Revenue). Here’s a pic of what is called The Sales Funnel stolen from Ash Maurya’s blog post on the subject.

Acquisition channels = How many unique visitors are you getting each month from each channels they are coming from. Here’s a very basic example.

Organic search = 2000 unique visitors per month

Keyword 1 = 1000 uv/m

Keyword 2 = 500 uv/m

etc..

Paid search = 1000 unique visitors per month

Adwords = 400 uv/m

Display campaign = 300 uv/m

Retargeting campaign = 200 uv/m

Linkedin ads = 100 uv/m

Referral = 1000 unique visitors per month

Twitter = 400 uv/m

Techcrunch = 300 uv/m

Guest blogged article = 300 uv/m

etc..

Direct = 1000 unique visitors per month

Acquisition conversion rate: Out of all the unique visitors who visited your website from each channel, how many performed a basic action to start using your tool? (such as, and/or…created an account, clicked on a link, commented on a post, downloaded your app, stayed more than 2 minutes etc..)

Acquisition conversion rate =

Total # of users who signed up to your website from a channel / Total # unique visitors to your website

Measure these for a certain period of time, month, week etc.

Activation rate: Out of all the unique visitors who visited your website, how many had an awesome first time experience? (this can be determined by tracking certain events. For example: and/or …created an account + gave you their email address + clicked on a certain feature + stayed more than 5 minutes + added an avatar picture + added their first and last name + finished the walk-through).

Activation rate =

Total # of users who signed up to your website and had a great first time experience on your website / Total # unique visitors to your website

(For a certain period of time, month, week etc.)

Retention rate = Out of all the unique visitors who visited your website for a specific Month (M) how many keep coming back and using your tool actively in later months M+1 M+2 M+3?

Retention rates are measured in cohorts. It’s a scary term at first but it’s actually super simple. Christoph Janz is the king of cohorts. A cohort is just a group of people within a specific period of time. Everyone who signed up in April = The April cohort.

May retention rate % for the April cohort =

Total # of users who signed up to the website in April + were activated + are still coming back to the website in May and actively using it / Total # unique visitors to your website in April

June retention rate % for the April cohort =

Total # of users who signed up to the website in April + were activated + are still coming back to the website in May and actively using it / Total # unique visitors to your website in April

Referral rate = Let’s put this very basically, for every 10 new visitors who sign up to your website, how many people do they invite to your website? Then how many of those invited over actually create an account?

Referral rate =

# of people who signed up after being invited over / Total # of people who signed up during that period (of course, excluding the invited ones)

This number is super important. Let’s say you have a referral rate of 50%. That means that for every 10 visitors who sign up, you’re actually gaining 15 new users. A referral rate over 100% means you have achieved viral growth. You can also calculate this the way Dave McClure does:

Revenue = How many users are paying for your product monthly (MRR), how long will they keep paying (CLTV), and how much did it cost you to acquire them (CAC) as paying users. Hey wait! Isn’t that similar to the Lars Logfren style? Yup it is. You’ll see more and more cross over from now on.

Monthly recurring revenue (MRR) =

Total revenue earned from the sum of all monthly subscriptions

“Your target should be to keep this growing, always.”

Customer Lifetime Value =

MRR / # of paying customers x how long on average a customer keeps paying for your product before he drops off

Customer Acquisition Cost =

Sum of all expenses made to acquire new customers / # of new paying customers

If you like this, here are some other (more in-depth) resources for pirate metrics:

Meet David Skok, a SaaS metrics guru. His blog posts have some of the most exhaustive and detailed explanations on what metrics to look out for, and most importantly how to set them up. VCs and entrepreneurs alike follow his lead. Almost all the metrics explained above were deciphered using his formulas.

David Skok puts great emphasis on two extremely important metrics:

LTV : What is the monetary lifetime value of a customer

CAC : How much does it cost to acquire a typical customer

In one of his blog post comments he details some of the most important metrics to present when meeting with VCs.

MRR Churn Rate =

Churned MRR / MRR from previous month

CAC =

Total of all sales and marketing channels to acquire users / Number of new customers added

While most articles would advise you to concentrate only on the most important metrics, Aaron Beashel does exactly the opposite. He gives us everything. I’ve highlighted here some of the most interesting and creative ones. I find it particularly interesting the way he uses Time.

Average Revenue Per Customer – Average revenue an individual customer generates over the given time period

Time to Purchase – Average time it takes people to go from sign-up to purchase

Time to activation – Total time it takes to go from sign-up to activation

Logins to activation – How many times a user logs in between sign-up and activation when coming from the selected customer acquisition channel

Logins to Purchase – Total number of times a user logs in to the application before Purchase.

Time to paying – Average time it takes people to go from sign-up to paying customer from the selected customer acquisition channel

Tomas Tunguz is one of my favorite people to read on the internet. He’s all about data and no BS. This approach to metrics is used to answer high level questions (by investors, board members, VCs) on how your business is doing. It’s extremely straight forward.

The metrics are cut into three groups:

Distribution:

Engagement:

Revenue:

To calculate these you should also understand the concept of “Trailing six month average” (TSM). TSM is just the average growth rate over the last 6 months. So for example if your rates are consecutively 5% 10% 15% 20% 25% 30% your TSM is (5%+10%+15%+20%+25%+30%)/6 = 17,5%

There’s no real point in me copy-pasting more of his findings here. Like I said he’s very easy to read. So I suggest just go to his post which are always pleasantly clear and concise.

If you’ve made it this far congrats. I’ll leave you with a few tools that we use and recommend when setting up your metrics tracking.

There’s a killer article by Ash Maurya that explains why your app or website doesn’t need (and shouldn’t try) to attract thousands of users right from the start. The basic idea of lean methodology is to build your product based on user feedback and user metrics. But that can be hard at first (I haz no users!) AND can be dangerous if you’re not building for the right users. It takes long hours and sometimes big bucks to acquire users. You want to know who your best users are and where to find them BEFORE you start spending countless hours on acquisition channels to attract them to your site.

Fine, but tell me more about why this matters!

Since your early adopters are the ones who feel the biggest pain towards what you are solving, they will be the most responsive to your solution. They will be the most likely to continue using your product. They will be the most tolerant to any bugs an early version of your product has. They will be most likely to promote your product to others and become your evangelists. And don’t forget they will probably be the most likely to pay for your product – sometimes before your product even exists! So identifying who your early adopters are as soon as possible is extremely important. Not only will it give your company early traction, but it will also ensure you are building your tool based on the right feedback.

That’s great, but how in the heck do you identify these early adopters??

At Twoodo we all had different assumptions on who our early adopters would be. Each one of us came up with a persona of who we thought would adopt our tool the fastest. We did this each in about 15 minutes, nothing too fancy. I’ll share here a template for customer personas you can print and use.

These were the personas we came up with:

The entrepreneur: Tech startup CEO

The techie: Programmer part of a tech team in a medium-sized company

The project manager: Small team manager in a large corporation

The student: University student working on projects

The remote team leader: Leader of a virtual team, works with remote workers

We then spent two weeks getting out of the building, meeting people and making Skype calls to people who fit these criteria. In total we carried out a little over 100 customer discovery interviews. It took quite a while. We hoped that would be enough to take a clear decision. But even after those interviews, we still weren’t 100% certain of which personas had the biggest pain. Which segment was really going to be our strongest early adopters. The data just wasn’t clear cut enough. We needed a way of testing that was more scalable and that didn’t involve so many man hours. Here’s what we did.

1. We built 5 problem-oriented landing pages

First we designed a template for a “problem-oriented landing page”.

1. Logo + tag line

2. Description of the PAIN that we were solving

3. Very brief explanation of our solution

4. Link to a video and/or full explanation of how our product works

5. Sign-up form to our “waiting list”

Here’s an example you can use if you want to build your own. I used an ingredient delivery service as an example. I have no idea why. We then briefly adopted the tag line to the personas we wanted to test. The generic version was “The ultimate teamwork tool”

After adaptation it was..”The ultimate teamwork tool for startups“, “The ultimate teamwork tool for students” you get the point…

a. Pain conversion rate: How many unique visitors to our page from each segment validated the pain we were addressing = How many people clicked the link to see the video / total unique visitors.

b. Solution conversion rate: How many unique visitors to our page validated the pain AND the solution we were offering = how many people signed up / total unique visitors.

It was very important to track both of these events. It would enable us to determine which group felt the biggest pain and whether the solution we offered was adapted to them.

NOTE: If you don’t have in-house coders, you can use Optimizely or Unbounce which are extremely easy to use.

2. We attracted visitors from each persona to test conversion rates

Each product is different and so requires a different number of people to test it. Since choosing our early adopters would have so many implications on our future acquisition efforts, we decided to only make conclusions based on at least 400 visitors per page.

So how did we acquire visitors with minimal funds?

Free hustle techniques (takes a bit of time but is totally dollar-free)

Lets use the Startup CEO persona as an example. Since building our personas and carrying out customer discovery interviews we knew all our personas quite well. We knew:

what issues they were facing,

what kind of keywords they were searching on Google,

what questions they needed answering,

and where they like to hang out on the internet.

We then used a number of free “hustle techniques” to attract them to our Startup CEO landing page.

1. Linkedin Groups and Google Plus Communities

Linkedin groups are a great way to find groups or people with common interests and get their attention for free. Look for specific groups that you know your persona is likely to be taking part in. You can then post a brief message explaining the pain you are solving and a link to your landing page. We posted on approximately 20 groups per persona.

Here is the structure of what we posted:

Introduce yourself as one of the personas so that readers can identify with you.

Describe the pain

Short explanation of the solution

Kindly offer people to come check out your solution

Here’s an example of a post:

“I manage a 6 person startup. Our main issue was that we are using too many different tools to communicate and collaborate (email, chat, skype, task management tools etc). Information is getting lost and team members are being distracted. We tried a bunch of project management tools but most are too complicated to use and or too rigid.

We came up with our own solution, a collaboration language that uses simple tags and allows for actionable conversations using twitter-like language. Please check us out and tell me if you agree with the problem we are solving. We’re currently in private beta so feedback from you guys is more than welcome! (it’s all free).

www.twoodo.com/the-ultimate-startup-collaboration-tool”

We usually got 80% of our Linkedin visits from only two or three of the groups we posted in. Make sure the groups have many members and the activity looks quite high.

Also, some groups require an invitation. Just ask to join and you’ll get accepted in 95% of the time. Private groups tend to have a more quality reader base.

2. Quora questions

Quora is similar to Linkedin groups in that a bunch of like-minded people interact on common subjects. We used the same structure as for Linkedin. We found questions relative to Startups and collaboration tools. We then posted our answer as a suggestion to come check out our solution.

We also posted a few questions like “what collaboration tools should a startup CEO use?” and answered it ourselves 2/3 days after posting. This didn’t work so well though so we dropped this technique rather quickly and even erased some questions for fear of seeming spammy. Answering questions did however drive good traffic.

Oh and don’t forget, you can also use the same technique on Quibb or also Yahoo Answers (especially if your persona is more consumer that enterprise)

3. Twitter

Following someone on Twitter is a great way to grab their attention for a few seconds. We used a tool called Tweet Adder that let’s you search for what people are talking about and rapidly start following them.

For every 100 people we would follow, we’d get an average of 8 unique visitors to our landing page. Of course this depended on the search we made and on the persona. If you use this hack, don’t forget to unfollow them 3 days after following them or your twitter follower stats are going to be a mess.

We also used Followerwonk to search people’s Twitter bios for the same keywords we had used on Tweet adder.

4. Comments on blogs

This is a great free acquisition channel. It takes a long time to carry out but we’re still getting visits from it today. Search for a keyword that would interest your persona. We used the same ones as on Twitter. For example, I searched for “Startup CEO tools” and proceeded to comment on all the blog articles that accepted comments. I limited this to the first page of google. Sometimes going to the second. We used a very similar text to the one used on Linkedin groups. The main difference was that we would first add something to the article. This would usually be a link to a useful resource relevant to what the article was discussing. This shows that you’re interested and not just posting spam comments. So always give before you ask for a favor. Reaction to the article first; request to go to your landing page second. Here’s a full guide on how to use blog commenting as a traffic-driving technique.

Paid acquisition: $5 a day Adwords campaign

Hustle techniques are great but they might not always provide you with a fast and reliable flow of visitors. We wanted to finish our test in less than a week. Three of our pages were getting the necessary traffic, but two weren’t. Then I was given this article by our lean apostle Kees van Nunen. By using some long tail techniques you can find a constant and steady stream of visitors to make up for the gaps. At a minimal cost.

We came up with a list of about 10 keywords for the 2 personas that were lagging. Here’s what we used for project managers:

“project management”

“project management tips”

“project manager tools”

“project management tools”

etc..

From these lists we then used Adwords free keyword planner tool to come up with about 500 long tail keywords which had low competition. Although each keyword would have little traffic, they were dirt cheap, and if I used enough of them I could achieve good numbers. Here is a step by step (screencaps will be included):

1. Find about 10 keywords or expressions that your persona would search for

2. Choose only keywords that say “low” but have thousands of searches attached

You end up with a phrase or keyword that a lot of people are searching but there are very few answers for – you will be their God and give them the answer, therefore…

3. Create ads tailored for your personas

Within 2 days, all the gaps were filled. We spent a total of $35 (US) on the adwords campaign.

Since carrying out this experiment we’ve found tons of other techniques you can use. This article details a bunch of them and this article by Jason Evanish

As a side note I’d suggest that if you’re making ANY user acquisition efforts I’d highly recommend using Google’s URL builder to track your efforts through UTMs. It will work with Google Analytics, Mixpanel, Kissmetrics and tons of other analytics tools. We’ll write about this in more details soon.

Conclusion

As a conclusion I’d like to share we you the stats we obtained after 10 days of running this campaign.

There were 2 clear winners here. The Startup CEO and the Techie. Not only were their conversion rates higher but we also obtained unique visitors from these personas much more easily. The interest was simply greater from these types of users. The pain we were solving was much bigger for them.

Based on these results and from our customer interviews, we confidently started building our customer acquisition channels based on these two personas. We still have user signing up to the tool from other customer segments, but we’ve built the tool around the needs of these early adopters.

a list of methods and “how-to” steps to avoid paying to acquire beta testers

Liam Gooding from Trak.io has a fantastic list of resources to find beta testers here.

But how do you find beta testers for free? Paying for as little as possible (i.e. bootstrapping) is significant at the startup stage. Whilst I agree with most of his suggestions, there are some issues with the current “free” beta testing resources.

Why services to find beta testers are not so budget-friendly

some Erlibird beta testing services cost over $200 a day for the premium times.

Betalist and Startuplist are so full of startups that yours will easily be drowned out as there are few alternative websites (and pretty much the same startups are on both)

we estimate that from Betalist you can expect to get about 150 beta testers on average. Nice, but is it enough?

Killerstartups is great if you have the cash to pay for the quick review ($167) – otherwise they claim to take three to six months to review you, and even then you may not be featured very prominently on the website. Chances are that by then your startup has surpassed needing to find beta testers or, heavens forbid, imploded.

What else can I do?

The next resource that Gooding recommends is Quora. Quora has positive and negative attributes as a beta tester resource as well. Your best chances of getting people to click on your website is if you have a community built up based on showing your past expertise in a certain niche. The problem here is if you have not spent time on Quora, nor have you contributed the article-style responses that gain so much respect in the community. Unless you dedicate enough time per day building up a reputation, you are unlikely to gain many testers from this source. The same applies to Hacker News.

The best resources Gooding gives for the newbie on the scene with no cash to spare are tips 6, 7 and 8. These are:

And now for my 2 cents…

Whilst Gooding’s list is a great start, there are a few other free resources out there that you can tap into.

At the startup stage, you are looking for the right beta testers (aka: your early adopters, your audience, your future evangelists) – especially if you are also focussing on feedback-driven iterations (FYI: you should always be). Here’s an article that shows a cost-free way of finding the “right” people. The same principles can be applied to finding beta testers.

1) Use Google+ communities/Facebook groups/LinkedIn groups

I’ll expand on G+ as an example, but the same principles apply to all the platforms mentioned.

Step 1:

Go through the list of communities using keywords related to your product (for us it was “productivity” and “collaboration”) and join those that have more than 50 members (this was a number we set for ourselves – you may want to opt for a higher/lower number depending on what your company offers)

Step 2:

After an introduce-yourself post in these communities, and some commenting around on what was there,

Step 3:

Post a carefully-worded non-advertisement sounding request for the members to help you by giving feedback. We appealed in a genuine fashion to their interests in productivity tools and our need simply for their opinion. The first attempt went well. The second time we tried it we got booted out of a few groups because we got all “advertise-y” in the tone. Lesson learned!

It’s very important not to sound like a promotion. It helps if you have built a following already, but there are tactics a new person can also use as long as you don’t piss everyone in the community off. Be humble, open and honest – stress that you are asking for help, nothing more – and that they seem like the right folks to help you.

Make the most out of your knowledge. If you have made slideshare presentations, there should be enough info to create some killer infographics. Here’s a guide on how to map out the content you need for a killer infographic.

Step 2: call to action

Make sure your call to action (BETA TESTERS WANTED!) and links are visibly included at the end of the infographic.

Step 3: design

Also, prettiness helps a lot if you’re gonna beat a similar infographic. If you are no designer, this might be a job for, 99designs, Odesk, Elance or Fiverr. Alternatively, pay $14 a year for Piktochart, and create your own infographics easily.

Step 4: publish

If you don’t want to publish it on your home blog, SocialMediaToday (or a similar site) is a good option. It has a big following plus an internal community that can promote your content (don’t worry – it’s also about biz dev, strategy, marketing etc. as well – not just social media). Sign up for an account, and submit content and infographics. You have to pass their standards (if they haven’t picked up your post in 48 hours consider it rejected). Once you do, however, you know that a) hey, it must be decent and b) you have a base of people who will promote it. I recommend Social Media Today because of past experiences with contacting blog owners or popular online publications. It can take a very long time. On this website at least you know in two days whether your content is acceptable or not, plus there is a community of avid marketers and bloggers ready to spread your great content.

Neil Patel of Quicksprout wrote a fantastic guide to making your infographic go viral, and also a list of directories where you can submit them to increase their visibility (beware – some now charge money for submission).

Twitter, Flickr and Pinterest are your best buddies if you post the infographic on your home blog. They require researching the right hashtags and a cracking one-liner to get clicks and RTs/RPs. Choose trending hashtags for a wide and active audience, but accurate hashtags (max. 2-3) are the best. Always check that there is substantial activity on a hashtag before adding it, because otherwise you are just wasting your time.

3) Hunt for the unhappy ones, and get them on board

What better testers than those unhappy with your competitors? Offer them a chance to influence and build your product. How? Take out your list of competitors and start with Twitter. Try combining “sucks” with the company name, eg. #AT&T:

Read through the posts and curate a list of people unhappy with your competitors. Reach out to them. The next step is to use search engines to find bloggers, journalists and forums where your competitors are getting bashed. Reach out to these people as well.

*hint – Yammer is one of our competitors

Careful now! This blogger ALSO has a competing company, which we only found out after we looked him up.

4) Blog comments

Step 1:

Set up a Disqus account, a gravatar account and a standardised bio with links to your company. In the bio, you can specify that you are looking for beta testers. Your avatar should be consistent across the web so readers easily recognise you. Also make sure that your bios on Facebook, Google + and Twitter have calls to beta test your product.

Step 2:

Draw a list of the top 20 blogs that come up on Google blog search/Technorati results for a specific expression that your personas would be looking for, eg. “online collaboration tool”.

Step 3:

Spend an hour a day on blog comments on these blogs you have identified. It’s a great chance to a) read up on relevant industry content and b) get seen. Don’t lie about what you’re there for. Here’s an example from us on The Next Web.

The message structure should be:

1. Say something nice about the article

2. State a story or user case of the problem you are solving. This can be your own story.

3. Problem with existing solutions

4. How your solution solves this pain

5. Kindly ask people to come check you out

You can also use this time to build up a Quora reputation if you think that’s more relevant to your industry, but I personally like to cast a broader net.

Remember…

There are precious few short-cuts to free stuff, even including how to find beta testers for free. This list is as cost-effective as I could make it, but it will ultimately rely on your knowledge and industry savvy to make the maximum impact. Plus a whole bunch of researching and writing time!

If you need a guide on how to get started with beta testing, apply for a free beta testing plan from Centrecode here, and either use the results as a guide or employ them to execute it.